Tamil Nadu for new infrastructure fund

Says the fund should be set up with private sector financing wings of multilateral agencies like World Bank, ADB, JICA

The public-private partnership approach towards infrastructure development has not provided the much-needed impetus for investment, said Tamil Nadu finance minister O Panneerselvam.

At the state finance ministers meeting, chaired by Union finance minister Arun Jaitley ahead of the Budget, on Monday, he suggested setting up of an Infrastructure Fund with the private sector financing wings of multilateral agencies like World Bank, ADB and JICA.

 

In his speech at the state Finance Ministers meet, chaired by Union Finance Minister Arun Jaitley, Tamil Nadu Finance Minister O Panneerselvam said infrastructure projects are key for economic growth.  

 

“It is necessary to point out that the PPP approach, which has been talked about for some years, has not yet provided the much needed impetus for investment”.

 

He alleged that there are some serious and complex issues involved in funding infrastructure projects. According to him, the Congress-led UPA government's move to provide “take out” financing only helps projects which are already completed and bails out banks and financial institutions. 

 

He suggested that the Centre should set up an infrastructure fund as a line of credit to provide long term finance (more than 12 years) to infrastructure projects in PPP mode.

The Fund can also rope in private sector financing wings of multilateral agencies like the World Bank, ADB, JICA and funds like sovereign funds, overseas pension funds and insurance funds, he added.

 

Panneerselvam also proposed the idea of infrastructure viability gap funding committees, wherein the projects are cleared by the State level committee with a representative from the Centre. 
 

TN asks for infra finance company status for TN-run NBFCs

 

Tamil Nadu government has asked the Centre to provide Infrastructure Finance Company status to the Tamil Nadu-owned Non Banking Financial Companies (NBFCs).  

 

The companies include Tamil Nadu Power Finance & Infrastructure Development Corporation, Tamil Nadu Urban Finance & Infrastructure Development Corporation and Tamil Nadu Transport Development Finance Corporation Ltd.  

 

Tamil Nadu's Finance Minister argued that these NBFCs should have access to market and institutional borrowings on par with the private sector Infrastructure Finance Companies in India.  

 

"These need to be given permission by the RBI,” said Panneerselvam.